points the griddle the crowding of the agenda and effectiveness of minority party obstruction beach legislation is never the powerful political incentives frequently stand in the way of compromise even when there are paths open in liberal and conservative agendas. >> thank you very much. before we move on to john hilly we were talking in the earlier panel that if there's a health care bill it will be passed on a street budget vote. what do you think that means for the future?

today i'm going to offer an idea for a new budget system for our federal government. to supplant the current one that is clearly not working at all. i've tried to design this system that it could be both fiscally responsible and politically viable, which is really the trick. and it's called square one. which you'll see in a minute why i call it that. but first let me give you the basic concept. this system tries to create incentives for partisans to come together and work constructively together to reconcile their policy and political differences. but if they fail politically to do that, in this system, the default mechanism for the federal budget is fiscal responsibility. so i'm going to give a bare

bones description of this system and then i'm going to circle back and talk about its attributes including critically its political ones. and again, this is new. you'll see that there's three interlocking elements involved so i ask you to bear with me. i'm going to try to be precise and ask you to focus. so first and foremost, the key element is to invert the problem of deficit reduction. rather than forcing our elected representatives to make the tough policy choices to reduce the deficit, we set up a locked-in budget rule that could do the work. the linchpin of this system is a locked-in and comprehensive rule, and i emphasize comprehensive generating budget savings. it must affect a broad swath of the federal budget. that's essential to allow the needed savings to be generated and to be done in a balanced and not unfair way. now, a strong version of this

straightforward and comprehensive rule would freeze domestic spending, freeze defense spending, freeze automatic cola adjustments, freeze the inflation indexing of the tax code and freeze other across-the-board automatic type of payments. and so you can see why i call this square one because it goes back to square one putting lots of potential savings in the pot for potential deficit reduction. and, of course, if this rule were allowed to play out and all those freezes did take effect, it would lead to a balanced budget in some specific number of years. so that's element number one. here comes element number two, and this is the really important part that tries to let the political system be successful. we need to give our representatives a way to allocate scarce resources in a positive way. and i do that by adding back what i call a fiscal dividend. and the idea of a fiscal dividend is actually quite simple. in this context it's an amount

of budgetary resources that are made available by not cutting as deeply as the comprehensive rule would if it were allowed to go into effect. now, there are a couple of ways of doing this. and i'm going to take a very simple version of it, although, i say there's others. the simplest would be to express the fiscal dividend as a percentage, say, one-half of the annual savings that would be generated by the rule. however it's done, the key is to create this fiscal dividend which the political system can allocate. for example, and as part of the annual budget process, our elected representatives would determine the use of the fiscal dividend. it could go to partially or fully offset the cola's or partially offset indexing if the tax code. it could be used to raise either defense or domestic spending above last year's level. but very, very, very importantly, they would be free

to make other budgetary changes as long as those generated the savings needed by the rule and clearly if they didn't like the savings being generated by the rule, which it's set up so that they won't, then they are completely free to offset those savings with others but all must be within the budgetary box. now, here's element number three, and this is the one that encourages partisans to work together and also sets the default reading on the federal budget as fiscal responsibility. the first element is to abolish reconciliation. it has been massively abused and it encourages terrible behavior by both parties. the majority party tries to steam roll the majority or it melts down, the minority sits on the sidelines and tries to make the majority melt down. under square one, budget decisions would not be part of any privileged bill as they are today. members of the two parties could

either work together to allocate the fiscal dividend as well as make other budget decisions or they could disagree, fail to pass a bill and invoke the filibuster in the senate if they so desire. but in the event of such a political meltdown on the budget bill, which allocates the did i have dent as well as making other budgetary changes, the system would revert to existing law. and that includes the comprehensive rule generating budget savings. those savings would float to deficit reduction. under this budget system, the default setting in the event of our leader's failure to act is fiscal responsibility. now, those are the bare bone mechanics. now, let me talk about the attributes and some of the political aspects of this. okay. the first and obvious objection is that our elective representatives will never, ever, ever agree to a budget system where the prospect of imposing pain. well, maybe but maybe not because this concept is quite flexible.

it seems to me that the really important part of a workable budget system is not at all how quickly we get to balance. but it is about having a permanent system that is tilted toward fiscal responsibility. that is how you assure all those holders of our sovereign debt and all those currency and bond markets that we're on a good course as was the topic of yesterday's discussion. ™ having been a practitioner, in our professional lives, there have been two great structural fiscal implosions, in 1981 and again, in 2001 and 2003. the first one took 16 years to correct. this one will certainly take as long. to me, the prime objective should be to build a permanent budget box that is fiscally responsible and does not permit the kinds of fiscal implosions that have so hurt our economic standing. now, what kind of flexibility am

i talking about? it has all sorts of flexibility, although it must be comprehensive the rule does not have to embody a full freeze. and you could make the fiscal dividend any size you wanted by manipulating the size of the percentage cut that would actually be the percentage amount that would be the fiscal dividend. and, of course, and especially in this time, you could delay or phase in the start of the regime until economic conditions improved. and, in fact, you could trigger the rule under something like obvious measures such as unemployment measures of return to health of the economy. but the one thing that is absolutely essential is the broad-based rule. as many of us can recall, one of the several problems was that the sequester was narrowly and unfairly pointed at the appropriated accounts. we can discuss later how this my system differs from graham's but the essential part of square one is a comprehensive rule that spreads the pain widely and not unfairly.

so that if the rule is invoked, the only serious -- really serious dislocations will be electoral. now, let's consider another potential objection. even if the systems in place, our representatives will never want to cut colas, not offset the tax code, freeze domestic or freeze defense spending. absolutely correct. my answer is, fine, then don't. have a political fight about how our government's budgetary resources are used. make your best arguments. gather you're coalitions and fight it out in the open. this system absolutely encourages the party to find other savings and actually and to cure the deficit and maybe force the fundamental reforms that are so needed on both the tax side and expenditure side of our government. but remember, if you melt down and don't fulfill your job description, then you'll be reverting to the rule that does the cutting. you will have failed to add back the fiscal dividend that was available to attend to some of our country's need but unlike

the current situation in which legislative and budgetary fights put our country in a deeper fiscal and economic hole, this failure would have two virtuous results. >> john? >> the default setting would be fiscal responsibility and the next election would be very, very interesting. there are a couple other reforms that need to be part of this such as paygo and i can leave that discussion -- >> we can talk about that later. but let me ask you one before we leave, ask you one broad question. i mean, i went -- i first came to washington in 1980. and i was working for the "congressional quarterly." i thought well, if i'm going to work for the "congressional quarterly" i ought to learn all the rules of congress and so like a month and a half i was studying the rules and i was going to be the bobby byrd of journalists and after filling my head with all these rules and every time i'd learn a rule i'd start discovering exceptions in the way people got around them. finally, one of my wiser colleagues came up to me and said, you know, there's only one rule you need to know and i said what's that? at the end of the day, congress

can do whatever it wants to do. haven't we seen that rule particularly in this area of fiscal policy demonstrated over and over and over again over the last three decades? and why would this system work where all others have failed? >> well, because there's good rules and there are bad rules. and if you take graham ruddman hollings. there were several problems. i mentioned some -- graham basically said use the current system which is not bipartisan. cut, cut, cut and if you don't cut enough to hit this sort of arbitrary fixed goal, then, you know, we have a sequester all of which was un-reich and that's why the system died within a couple of years. what this tries to do is to -- it basically has a carrot, a stick and an electoral hammer, which is the carrot is work together. and you can reconcile your differences and you get a bonus

of allocating the dividends and it gives them a reason to work together and get the reck shi but if you fail to perform then there will be electoral consequences because the automatic rule on politically important constituents. and so it's the -- it's the carrot, the stick and electoral consequences. and alan, could i make one final summary? >> we'll give john a chance -- >> you could concede some of your chance. >> i think we will have plenty of time for discussion and i would like to have bill hoagland, and folks should know john wrote a -- what i would consider to be a president clinton book called legislating together and, i think, was on the '97 a balance budget act that got passed where he was working for the clinton

administration and managed to have house republicans, senate republicans, senate democrats all on one page using reconciliation. but he couldn't get the house democrats on board. so it's a -- it's a very good book and very skillful. if you look at the team here, you'll see -- i think the audience should know a heavy senate presence and i think anybody that looks at the present healthcare legislation would see that for some reason in american legislation, the game is usually a foot in the senate for a variety of reasons. and i know over the years, i've had some theories on it and i do remember once -- i opened up a law firm for former majority leader howard baker. i was launching and inflicting one of my theories on the senate on him and he looked at me in that way that former majority leaders can do which was enough of this. and he basically said, look, the

senate is very easy so you just need to calm down. it's the greatest deliberative body in the world. the members debate the issues of the day. our spouses socialize together. our children play together. and when one of us loses, we eat them. [laughter] >> so i've always liked that story because it gives the edge of the senate with both its self-importance but also they're playing for power and this is for real for the members. i think frances did a very good job of what i would say is laying out the consensus view in large parts of academia and the american public in terms of bipartisanship and partisanship and the relative roles. and i think my role here is to a little bit go with the grinch or scrooge. i used to take my children over

to the national theater and we would see "a christmas story" every year and when scrooge would launch into his early colloquy, i would turn to my wife and say, he's got a point. [laughter] >> you need to be frugal and she would give me the stare that wives reserved for their husbands when they said something stupid and put me back in place. but basically i would say the consensus view is that all of our problems in american politics could be easily solved if only the members and the parties would stand back and do what's in the best interest of america and engage in kind of an effortless bipartisanship. and that we have an era of hypertoxic unprecedented partisanship that's loose. first part of the argument goes to the partisanship. and i'm going to let larry

defend me on this view 'cause he's actually a student of this. but the level of partisanship in america today is not unprecedented. in the 19th century we had equal or worse. so it's just something to keep in mind, which is a historically perspective. in fact, when historians look at the partisan of today, they find it very self-indulgent compared to the politics that the founders had at the start. that we had in the civil war when, in fact, men used to go on to the senate floor armed when a member was almost beat to death by a congressman from south carolina or a massachusetts senator. so we just need to realize american politics have been filled with emotion and maybe the time when joe biden takes geithner across the potomic and kills him in the duel we'll match what burn-hamilton felt for each other. you have to realize that politics is a very intense business. the second part i want to go

through a little bit -- what's actually -- what i consider to be in the toolbox or the gearshift for american legislation and so when congress looks at an issue, what can they really do? and they really have three things. congress is mostly a status quo crisis-activated system so they're good in a crisis. we holler at them and it's usually messy watching them but they're pretty good. 9/11 for president bush, we came out with a t.a.r.p., $700 billion, a number picked out of the air, admittedly picked out of the air. congress delivered. a lot of hollering but they delivered. president obama shows up. he needs a stimulus, $700, $750 billion out it goes. so in a crisis, recently within the last year congress has thrown a trillion and a half dollars out on mostly hunches and guidance and leadership from a president in terms of response to what they see as a national crisis. congress is pretty good in a crisis. second thing it's got is partisan.

there's a partisan response that john mentioned called reconciliation. it's the one way through the filibuster in the senate and with 51 votes in the proper circumstances, you can prevail. a lot of folks have it as a dirty word. they call it partisan, reconciliation. but if i were to say parliamentary, then you'd say well, that's fine. all the other countries in the world have parliamentary systems where the executive and their legislative branches are in tuned in a majority vote wins. only in america. america is the only place in the universe where a minority and one of the legislative body can stop things which leads to my third which is the filibuster which leads to the third gear which you have which is bipartisanship but it's not easy, casual, kum-ba-ya bipartisanship. it is bipartisanship comes

because the majority has to negotiate with the minority and this is very hard. it approaches gridlock. frances did a good job of mentioning those who in fact said we'll get through it but it's slow. it's slow. so we have negotiated bipartisanship, not easy bipartisanship. in closing, i would just say i think you have to be realistic that we are in a long budget war. this has been going on for a period. social security went bankrupt in '83. and had to be saved. hogan won't take credit for it. medicaid went bankrupt in the late 1980s. we threw revenues at it. we're in it because of the recession and the boomers, this is more intense than ever. so the games afoot. my feeling is that we can go through a variety of options but the default option, if we don't get a presidential program

coming around in early 2010 that give us a strategy for the future, something along the lines, let's say john has, we don't get a commission that has teeth we will default to partisanship politics and i would see that as a long tough fight. >> lee, just one thing before we move on. i appreciate your historical perspective and accept the fact that when jefferson ran against hamilton, partisan strife may have been worse and certainly during the civil war when we were shooting at each other, partisan strife was worse, i take a somewhat shorter view of history, which is the history i know, 1980 to the present. and to me, it looks like a pretty straight downhill slide in the ability of people of good will from both parties to get together and address problems of common public interest as opposed to constantly looking for an edge in the next election. do you disagree with that? >> i do. that's why i'm here. [laughter] >> what you really have is you

do have an increase in partisanship since the second world war but the really key factor is that the south had two-thirds of the leadership positions in the house and senate and you had long-term democratic control in the house and senate. and larry is actually the expert on this. but starting in the '70s in the house, liberal democrats began to attack the southern strongholds for a whole host of reasons that most of us would agree with. so that blacks, so that women, so that consumers and the environmentalists can enter into the political equation. and what happens in 1980 is the system becomes competitive. republicans actually win in the senate and these swings are back and forth by one or two votes on every election. it's one thing to watch a football game and it's 55-0 and everybody is picking each other up and patting each other. you put them in overtime at the super bowl and they're going for each other in a hard way.

as long as you have parties that have the strategic interest in either maintaining power or trying to recover power, you're going to have a competitive situation. and so my feeling is that it's not because of men of good will who are having a problem. it's just the american political system, since about 1980 has been very competitive swinging back and forth, narrow majorities in the house and the senate and it just makes for a more competitive atmosphere. >> larry? >> it's a nice setup. first i want to thank the organizers of the conference. i enjoy it a great deal. i work at william and mary where mr. jefferson received his bachelor's degree. it's always a pleasure to go to uva to see all these insights he's applied. [laughter] >> lee is absolutely correct about the long-term partisan nature of congress but it is the case, i think, it has gotten worse since the 1970s according to the best measures if you look at the distribution of ideology,

20 or 30 years ago there was a lot of overlap. we had democrats who were more conservative than a lot of republicans and we had liberal republicans. since about 1980, that overlap has all but disappeared. indeed, the senate it doesn't exist anymore. the most conservative democrats ben nelson of nebraska is more liberal than the most liberal of the senators. in the house i think there's one individual, one democrat who is more conservative than the most liberal republican. i assume he eats alone and is a pretty lonely guy. so the task really before us is how to deal with these really daunting structural deficits within that kind of a political context. now, frances makes the point that we have research that shows that in the past, landmark legislation almost always has been passed with large bipartisan majorities. and to some extent that's the case. if you go back and look at final passage votes, they do tend to be lopsided. and if you look at the votes

they are quite partisan and the amendments or the content of the legislation is formed. in addition and probably more important, if you look at pre-1980, it was during that era that we had that middle that i mentioned before and you saw a lot of cross-partisan coalition-building because there were people in the middle. after 1980, as we see this slide toward a more partisan breakdown within the two chambers, you see disproportionately periods of divided government. and, of course, if you've got a president of one party and a congress controlled bit other you're going to have to have a degree of bipartisanship to get things done now we're in a era a very partisan house and senate and unified government and it's not a great surprise that really profoundly important legislation is being passed this session basically on, you know, a knock down, drag-out partisan vote. this is more predictive of what's to come than recent history would suggest. i want to talk a little bit about process. i really enjoyed what john said and i think he in his proposal and obviously this is new.

i have not read this before but based on what i have just heard he is raising the kinds of process-oriented reforms that we're going to hear a lot more about in the next 10 years and i'd just like to talk a little bit about those and some other stuff that's on the agenda briefly. i think it's useful to think about previous efforts of using procedure to drive down deficits in two categories. category number one would be where you have some kind of a rule that basically is put in place in the absence of an underlying deal or bargain or compromise aimed at making programmic changes so you have a situation where members of congress for whatever reason are able to come together and come up with a real programmic reform and what you do is you use procedure and the rules of the game to try to force them basically to do something that they really don't want to do because of the political costs. the second category of reform is when you use rules to lock in these negotiated compromises after they have occurred.

so members of congress get together. they have a knockdown draggout out fight and he they have a program reform aimed at bringing down the deficit and the task is how do we keep them from backsliding in the future and there's rules to enforce those agreements and lock them in. the best example -- i mean, as john mentioned of the first category would be gramm-rudman-hollings. and the use of paygo procedures basically to lock that in place. but what it seems to indicate the first category does not work and the reason is -- what john suggests is different than gramm-rudman-hollings. under the constitution of the united states, the internal rules including the budget rules of the house and the senate are the responsibility of the members. you can pass statutory rules but basically the house at any point in time with 51% of the members, 218 votes can go in there and change those.

so it is very difficult absent an underlying agreement to use rules to force members to do stuff that they really don't want to do because it's going to endanger them electorally. on the other hand, if political incentives are such that even for a time you can bring members together and cut some sort of a substantive compromise, rules and institutions and process seem to be, if used correctly, possible enforcement techniques and i think we're going to need to think about that as we consider more and more of these proposals along the lines of what john mentioned. another process reform that's received a lot of attention lately is the idea of a bipartisan commission. the chair and the ranking minority member of the budget committee, senator gregg and senator conrad have suggested creating a commission and basically bucking to this bipartisan commission made up of democrats and republicans, responsibility for coming up with some kind of plan which would then receive a guaranteed up-down vote in the house and senate. this might work. it might not work. it's hard to understand now -- i

mean, i can understand why republicans would support such a process because they are in the minority and the commission will give them half of the votes and that's a leg up. why the democratic leadership would embrace this is beyond me and my guess is they won't. any time? >> you've got another minute. >> another minute to wind up. but in the long term, one could imagine such a commission playing a viable and a constructive role in providing members of congress with the cover necessary to come up with the kind of deal that i talked about before. and then using paygo and related kinds of procedures that john mentioned to lock that in place. blame-avoidance is a very powerful incentive and as alan murray mentioned that the tax reform in 1986 should not have passed based on most of the theories of legislation coalition out there. but it did. nobody wanted to take the blame for killing it and you can imagine a situation down the line when there's more momentum

for reform out there in the electorate where a bipartisan commission could come up with a package and be credible and have general support and we could use paygo rules and blame-avoidance to lock it in place. >> boy, two advertisements in one session. that is very good. it is still available. amazon.com. [laughter] >> but a very interesting point. basically what you're saying is you have to have some sort of bipartisan agreement to proceed the use of rules? >> well, no. it depends. in this particular context, you know, with people polarized along party lines. if you have unified government it could be a slam dunk and if it's a bipartisan -- >> yes. >> just to add to that. i agree the institutional rules are no substitute for bipartisan support. i fear that no party in power, no governing party like the democrats with the current

leverage that they have wants to take it upon itself to impose pay. it doesn't want to take sole responsibility for raising taxes or for cutting spending or for a combination of the two. >> even if they have the votes to do it? >> so you need political cover. you need that coalition of elites that want to work together and that needs to come first and they can use institutional rules to help give them additional cover but that preexisting agreement is there on bipartisan lines i don't think institutions can bring it about. >> unless there is a real sense out there in the electorate that the costs of inaction are huge. that there's a real crisis along the lines that we talked about in session 2 yesterday. >> so bill hoagland used to be a foot taller than he was after working in the senate and after three decades of budget wars, what have you learned? >> thank you, alan. let me just begin by the young man out here in the previous panel.

i'm also bankrupting the healthcare system. all cards on the table. i work for cigna. a private health insurance company. and i just have to put -- and worse yet, i'm a registered federal lobbyist, okay? [laughter] >> you are the problem. >> i am the problem. okay, i'm creating all the problems. >> that was after three decades of trying to be the solution. that's all right. >> there were comments about the previous panel but we'll leave it for a later time. a comment was raised here -- i'm just -- everything has been said here but i haven't said he it so i'll get a chance to make my comments here. but since there was a question raised and seeing all the young students here from virginia, the university of virginia, where i sent a lot of my money with my daughter when she came down here, i thought lee had raised the issue about what was the purpose of the senate. and so many of us have heard this story so many times i just assumed you've heard this. but it goes back to washington -- or to jefferson

who was in france and he wrote back to washington and said what's the purpose of this united states senate? and he used the analogy at that time here in the south where the hot tea in the cup was poured into the saucer to cool and that the united states senate was like that saucer. and when you think about the fact that the house of representatives took all the 14 hours to pass a healthcare reform bill and the united states senate is at least on its 18th day of it, you can see that the saucer is cooling the healthcare debate and i think bring a number of revisions. quickly and i'll just make a couple of points because you a lot what's been said i agree with and i have some comments about john. john and i worked together a long time in a bipartisan manner to achieve a balanced budget agreement. that came about after a major crisis which was a complete shutdown of the federal government which is unprecedented. and a high level of partisanship that had built up prior to actually getting around to doing something to facing it. so one of the quick lessons and

take-aways that i would give to you is simply sometimes it takes a crisis to build a deficit reduction package. i began my year separate and apart from cigna working on a -- with a commission, a bipartisan center out of washington and they issued a report in july which was entitled red ink rising. and then next monday i spent the rest working off -- on another panel, the pew peterson commission on budget reform. and they'll be issuing their report on monday, john, and it will follow some of the things that you suggested here. and the title of theirs is -- i guess it was the red sea -- the red ink rising so i got drowning in red ink and red ink rising so i concluded that the purpose of this panel was to find a way to part the red sea.

and enact, of course -- -- it was accomplished by exodus with a significant help by a higher authority and my conclusion bottom line is probably, unfortunately, is is there's not much difference how we're going to part the red sea he. it will take some higher powers. quickly and just in the interest of time here, we're going to face this issue next week in an interesting way. our statutory debt limit of this country reaches about $12.1 trillion. we're about ready to breach that. i know there's ways treasury can slip this into next year but that $12.1 trillion will be reached next week. and how do you vote to raise the statutory debt limit? well, it's going to be interesting. it will probably be slipped into a defense appropriation bill and must pass bill by a week from today and so we're not really joined in this issue but in the process of getting to this issue, back to larry's issue, chairman conrad and mr. gregg

will have this bill to establish this commission that's set up to report to congress and they'll make him vote on it. they may get it out of the united states senate. i don't think mrs. pelosi will ever agree to it in the house of representatives. but i think it gets to a point that i wanted to make here back to frances' presentation and that is that isn't it unfortunate -- isn't it unfortunate that we've got to the place in our political system that we have to contract out our legislative process to a commission? i think it's sad. i think it's unfortunate, but it comes back to the partisanship that i believe that has developed. and i don't disagree with lee. there was a time when it was much more partisan to go back. but i think over the last few years, this partisanship has grown rather dramatically. and i want to try -- to the

panel last night, marginet, the one that you were on, what's caused all this? what's caused all this? and i guess political scientists than i have looked at this at some length. i find income growing inequality, immigration, technology, and in margaret's words last night, to democratization of the media and the interconnectionists between campaign campaigns bad lobbyist here. i think most americans, most americans will sacrifice for a larger public good but few will sacrifice for a competing group. and what we got is a lot of competing groups that have developed over the last -- my 20, 30 years working in the halls of congress. we got these coalitions that feed this gridlock to both sides of the aisle from moveon.org in fairness to the club for growth on the other hand. that polarization is just fed

out there by these organizations in such case that you then have the twitters and the facebooks and the internet and all these other social networks that i think -- maybe we have too much democracy in this country when it comes to this and not having the facts at hand. so let me just -- in the interest as i say in time here because a lot has already been covered, i don't think you can address this issue, john, unless we somehow can depolarize the congress. i don't know if there's a way. you cannot -- major legislation in this country came about, medicare, civil rights, no child left behind. but they came about because of working together across the aisle in a bipartisan way. and i know this is a downer to say this, but i just honestly seeing it developing in the environment that we are in today, and it will take -- we've been through this.

i see alice out here. it takes sometimes a crisis, whether that's generated by legislation, gramm-rudman-hollings out there because we did force an issue at the time on deficit reduction. or we are forced into it because of a national crisis, 9/11, or we're forced -- what we'll be forced on it is when our creditors stop lending us money. it will take a crisis to force, i think, bringing the sides out and bringing back and governing in the center. >> bill, that's very. i want to go back to the crisis thing in just a minute but before i do, you cited a number of reasons for what you see is increasing polarization in our politics. you didn't mention redistricting, the creation through technology, demographic data, house districts that are almost perfect political ghettos

resulting some say in a generation of politicians who never really had to have the experience of reaching out to people on the other side of the aisle. >> that's my error. i would put that on the list, too. it's going to get worst after the next census. >> i think it's easy to exaggerate the role in redistricting in party polarization. however, polarization has increased just as much in the senate as in the house and, of course, there's no redistricting in the senate. it has larger forces in the political environment separate from what's happening through the legislative politics of districting. >> i would argue it's increased in the senate because members of the house have become senators. [laughter] >> that's factor. >> just in terms of of a slightly contrary push on this since i'm kind of -- >> the contrarian. >> in terms of the grinch. [laughter] >> you know, mcchrystal in

afghanistan said, you have to start from somewhere from here. so a lot of what's going on in the discussions of partisanship and american politics and bill is a good indiana farm boy who believes in america and apple pie, and so washington has occasionally been traumatic for him. >> he's occasionally been traumatic for washington, too. [laughter] >> but i do think that you just have to take the situation as it is so we have more partisan society, geographically we've lined up more with the parties. the question is, really, what are realistic ways forward in this situation rather than kind of the -- almost the -- you know, kind of laments that you hear in the air. >> well, yeah. >> the only thing i was going to say i think john actually -- the

question is whether understand you need work for a lifetime or for a while. so gramm-rudman-hollings and the bill that came from the and that's why the republicans will not do those kinds of things again is because they lost a president over it. >> but they did the right thing. >> and then during the '90s we have a very good period. president clinton uses a lot of capital and raises taxes and all those that go with it and we have a surplus so we can in a sense possibly do it here in america. so i think that john with a default has, you know, an idea that's worth considering as to its implementation. if i were in his shoes, i would not rule out reconciliation 'cause i think what you'll need -- the american people just voted in 2008 to give a majority overwhelming political force to one party based on the last eight years. and so it's fair for that party

to exert -- i wouldn't agree with it -- but it's fair the way we do it, winners get to make the rules, get to exert their authority. >> there's something authority about this last election because if you think about the debate we had over the course of the election, there was a remarkable degree of discussion about exactly what bill hoagland has been talking about. it wasn't some sort of nostalgic lament when republicans and democrats could drink a scotch together at the end of the workday. it was about the system, a broad public perception that the system wasn't working very well. there needed to be an effort to pull together. and there was one candidate, barack obama, who made it the heart of two books on this subject. you had another candidate while he didn't talk about it that much had made it the core of his career in the senate reaching across whether it was russ feingold or ted kennedy or, you know, depending on the topic.

and yet here we are -- >> it was an accurate assessment. >> so the whole election was held on a false premise? >> it was held on an accurate premise with respect to the fact that the american people wanted george bush and the republicans out. and that they wanted new leadership and the new leadership promised the word "change" which is certainly fine. but it was an inaccurate characterization of how the system was going to work going forward. and the notion -- >> in retrospect clearly but did have it to be that way, john hilley? >> well, you know, i think partisanship is here to stay. and i think we'd be unwise to wait for its demise. [laughter] >> and so i think, you know, this decade has been very disappointing because our partisans have not had to really live up to their principles in any significant way. in other words, everybody has gotten a free ride, whether it's

doing medicare part d, whether it's cutting taxes. in other words, it's all been put on the tab. and so i think the way you make partisanship work is by creating a box in which they must have the convictions of their principles and actually make choices. and so that's what i've tried to do. and if we want, we can talk about how i think this could actually be implemented. bill, you remember gramm-rudman-hollings and that thing sailed past and it was on its way -- >> john, larry's point, but do you have to have at least bipartisan agreement to build the box? >> well, there's two ways that now sort of talking legislative strategy that i would approach this. there is a growing cadre of bipartisan fiscal hawks. it's not the majority at all. but there's a growing cadre and as we've talked about in the other sessions or heard about in the other sessions, a growing

desire by the electorate to sort of stop it. but believe it or not, there will be another debt limit coming right along here in the spring and that's the vehicle for doing a lot of things when people are staring down the barrel. and the other thing is that one legislative strategy would be to use reconciliation to end reconciliation. because this definitely saves money and so this could be put through on a majority line vote to establish a -- >> will it be respected if it's pushed through on a party line vote? >> well, if it's in legislation, you know, i would take that and just -- see, my view is, i worked with like newt gingrich. the thing i liked about newt gingrich although we disagreed of our policies and he was a man of his convictions and step up and say i'm going to cut medicare to pay for this tax cut and there was substance and willingness to make choices on that.

and so what i'm saying it's all about building the right box. i think our leaders across-the-board are really genuinely good people, but they can't be put in a bad situation where it's such an easy way out. >> i want to say where i was going was that i thought john -- i agree with john 100%. i think that you would need to reconcile to put the package in. you have prospects for at least eight years of a president that would defend it. and substantial majorities behind it. and if you get eight good years on this issue, that's a lot. and part of it you could abolish reconciliation but i think you're going to probably need it to get it in. so that was the only point i was going to make. >> bill? >> first of all, i think john has got a very interesting proposal here. as i would expect from john always, thoughtful. i don't want to -- i want to go back on a couple of premises, number one, freeze everything where it is.

freeze indexation, freeze colas, freeze medicare reimbursement rates, freeze everything. as you know when we went through gramm-rudman-hollings the first come off the table was medicare, and the limitation on medicare and the next thing to come off was any programs associated with, quote, the safety net. food stamp, child nutrition, wic, it went down the line. one could argue, it seems to me, freezing in where we are today, is the wrong thing to freeze. in other words, you've taken where we are today status quo -- some people would say that's not where we should be. the second thing -- >> can i respond to that one? >> sure. >> is that, yes, i mean, i intentionally -- the freeze sort of tries to break the mindset of i'm entitled. i'm entitled to my cola and have my taxes protected from

inflation, sort of this psychological debilitatity and i put tough things in there to force the political choices to go to the other kinds of savings that you're in favor of. >> to get to that end point, i agree with you. i'm telling you know, getting from here to there will be the difficulty. the allocation for the resources for the fiscal dividend. the reason we got to a budget budget as you'll recall we had a fiscal dividend that we held back and we wouldn't let them spend by the way because they wanted to spend it. and we added that to the deficit reduction. but i like your idea of the allocation. the only thing here -- and this is getting into the weeds more than we want to get into. but the problem i always run into is -- i remember out in 1990 and robert byrd, in fact, raised, oh, wait a minute, what about forest fires in the west, what about katrina? what about t.a.r.p.? what about -- in 1990, bush number one was sending -- was getting ready to send troops in kuwait.

how do you budget for those things? and so all of a sudden that fiscal dividend gets eaten up pretty damn quickly as we go forward here. >> what bill is raising here is a really important point which is the incredible abuse of the emergency provision. [laughter] >> and actually obama and bush are tied at this point. >> good. >> having both put through $880 billion worth of emergency supplementals. bush -- i mean, think of how different the concept of emergency from congress -- to me an emergency is something you can't expect and, therefore, can't budget for in advance. like a forest fire, like a katrina. well, the entire seven years' war and going is being paid for as an emergency exclusion. and so there are ways to deal with that that we could talk about, you know, what i think. >> let me ask larry and frances on something bill you said earlier. you suggested -- you pointed out that in the 1990s it was a crisis, a crisis of government.

that enabled you to reach some kind of an agreement. do you think that it's going to take a crisis, an economic crisis, a dollar crisis, something like that, in order to overcome the very significant political obstacles that we've been talking about for the last hour? larry? >> absolutely. >> you do. >> i just don't think we could use procedures and process to deal with the problem. i think the way to deal with the problem is to deal with the problem. >> and how about getting people of good will together and say, can't we all agree he? >> they are called representatives for a reason. there has to be a lot of momentum out there in the electorate where they're willing -- where they're willing to punish legislators for not taking action. when a crisis occurs, let's say people refuse to start investing in treasury bills, interest rates rise and the economy contracts, then -- and you start to see unemployment rise so then and so forth you can trace the inaction on capitol hill directly to these ill effects it

will create momentum for change on capitol hill and the process will move forth. >> frances? >> i think -- it's also very helpful if you could have a conspiracy of elites of both parties. a crisis helps to provide the momentum or the public pressure for change. but in order to impose pain it's very helpful for politicians to have political cover. and divided government often affords because because some parliament can have their goals without political cooperation. if you're imposing pain you can blame the other party for the pain and both sides will do that and then you have a deal that can -- that can force reductions. >> bob dole after losing his attempt to be president after running a very partisan divisive campaign but he said if he had been elected, his -- his plan was to call the majority and

minority leaders of congress to the white house on day one. and on day two. and on day three and just have them meet there every day until there was some agreement on some of these basic issues of common interest. can an approach -- is it naive to think that an approach like that spending your political capital if you really believe this is the biggest problem we face spending your political capital to deal with the polarization of congress, is it naive to think it can get you anywhere, bill? >> hmmm, i don't think it's naive. we all a -- listen, in fairness to president obama, he has said that we have to do healthcare reform because that is our -- and i would agree. that is our fundamental fiscal challenge that we're facing here. i just fundamentally disagree that what congress is

considering right now will do anything to reduce the fiscal pressures. >> well, what if he said on day one, you know, the only way we're going to do it right to get to frances' point if we have bipartisan support and so come -- you know, let's start figuring out how we -- i'm sorry, rahm, stay out of the room. >> that would have helped. and this is pretentious on my part and i shouldn't say this. the senator from this state met with him two days ago in a meeting. and i got kind of shot back at 'cause i said bipartisanship. he said, listen, it wasn't like this that we went this way and republicans went this way. we were willing -- we were willing to work here. but what happened is they went this way. i mean, we've got -- >> that's always a matter of perspective. >> obviously, coming from the senator from virginia, i respect his opinion on this. but there was an attempt this

summer, gang of 6, but the gang of 10, is not bipartisan. and when republicans criticize the gang of 10, say, well, wait a minute, you had an opportunity and you ran away from us and so we had to negotiate with our right and our left. >> john, could it have been done? >> no, because -- [laughter] >> the political lessons of the '80s and '90s were that there's severe political loss attached with stepping up and sort of either -- well, stepping up and particularly as a single party doing it. the president bush's 1991 deal, and the contract in 1995, those were all lessons of political loss. and, unfortunately, into this decade they've taken the lesson of political loss and not the obligation to act responsibly and that's why i think that -- but --

>> the public has punished politicians for coming together -- >> absolutely. and the only reason 1997 worked is after having been beat up for so long, they figured out, you know, the only way we can do this is in a bipartisan way. and some day, you know, they hopefully will get a box that can make them do that. again, i think our elected representatives actually behavior pretty well if the box is the right box. i think they behave appropriately when they're allowed to ring up $4 trillion worth of debt and go forward on that basis. >> we got a little bipartisan agreement here. do you want to comment on that? >> well, actually i think -- i think -- there's one other factor that john's remarks kind of triggered in my mind. i mean, for something that's early and quick and bipartisan here in the near future, i'm not sure i see it. but the real question would be, how worried is the administration about a real

crisis down the road or how obligated do they feel or even in the house ranks and the leadership? 'cause i think the senate -- there's actually getting to be almost a bipartisan working coalition that can cause a lot of trouble in the senate, 7 or 8 democrats, 30-plus republicans. i mean, i think that's going to be a problem over time. so i think you're starting to see a little mass there. so the question is, is this administration technically, not politically but technically worried about a possible crisis and its impact and, therefore, would be parts -- they don't have to subscribe to john in any particulars, but the question is is there some piece that they could envision that could even be thrown in over time so these things hit later. there's later pain because there's a long-term 15, 20-year future. and but put pain out in the future and the president having in his mind knowing where he wants to go then starts talking to both parties.

i think absent a strategy just come on and let's talk, not going to go anywhere but if one person particularly the president of the united states has some vision of where he wants to go and begins to start pulling the levers, you can never tell. it's like the nfl. you have to play the game. >> you have to come out of congress as they typically do and i think larry might be right. that you need a crisis to get this done. but what we can hope for is that some of these bipartisan groups are formulating some of these changes that could be put on the table but if you remember the stock market crash of '87, i mean, that was horrific in those days, you know, 21% drop in basically a day. and so we gathered a everybody into the capital. we were going to cut the deficit and we got zip because the system didn't have a way to deal with it and didn't have in their minds sort of a rational laid-out path that would allow any kind of success. >> that turned out to be a very temporary crisis. >> we didn't know that at the time. >> two weeks would you say?

>> and -- i mean, even an traumatic effect like 9/11 how long did the bipartisanship last after 9/11? >> it's not -- i assume this is part of what was discussed yesterday. it's not that hard to see the fundamental origins of the crisis, right? we're borrowing immensely from overseas. that's fine right now because there's not a lot of private sector demand for those resources but as soon as there is and as soon as the fed starts to retreat, you could see some pretty significant pressure for action. is that what it's going to -- shall we just sit back and wait? >> no. >> we do to a large extent, it's stunning the extent to which the source of the problem is focused in a few entitlement programs. i mean, to a large extent this is a healthcare problem. and as was discussed in the last session, we needed to start discuss those problems and it

could take over time, over 10 or 20 years. >> go ahead. >> i want to pick up this last point to tie the previous panel to this one in just a second. let me put my budget hat on and not my cigna hat. i work for republicans, yes, but this debate like over, quote, cutting medicare turned me off completely. first of all, you're not cutting the medicare and you're slowing the rate of growth and i don't know about these problems but you're slowly the rate of growth. now, i agree that was about $400 billion in the package, maybe $500 billion. at the same time, that package on the senate floor adds about $900 billion in subsidies, expansion and medicaid -- medicaid 100% coverage. so you net are adding $500 billion and you're going to tell me we're going to come back and now we're going to take on medicare if this package passes or -- and we're going to take

taxes by the way raising taxes? i'm very nervous that this package is going to make it that much more difficult. >> yeah, well, let's talk about that. this panel is in agreement with the last panel that there's not much in that bill that actually deals with the cost problem. but there was some optimism on the last panel that, yeah, deal with the coverage problem first and then we'll come back and deal with the cost problem. i always thought it was -- i mean, and maybe this comes from covering the 1986 tax aid that it was, you know, the candy was part of the incentive to get people to take the caster oil. that you had to put the two things together to make the package work. >> the problem is that the insurance industry has agreed no preexisting conditions, guarantee issuance, all the things that everybody wants. but those provisions really don't -- don't -- and the expansion, the exchanges, all that, they agree to all of this. but what have they done?

most of those don't take effect until 2014 after the next election. that is really lacking here. i don't think the public has any sense how serious the problem of cost inflation in the health sector is. people are so insulated from the rising costs. they don't pay them because they have insurance through their

employer or because of medicare. people have not been exposed to these costs and have no real appreciation of how all of control they are. the politics of cutting medicare that we have seen unfold is another illustration of the perils that a party undertakes to attempt to impose anything on its own on single party lines. you can always be attacked for cutting popular spending. >> a have the health care debate -- i got the deficit over time as the eighth issue for america. >> it is the same debate. >> folks say that. $1,000,000,000,002 on the federal side in your rate is $3 trillion. lots of pieces we are confident we talking about.

i was going to say health care is supposed to be one of the keys in terms of doing this. it seems to me over the last 30 years taxes are going up and down. we realize we can raise and lower taxes to some degree. the bush tax cuts expire next year. i don't know what the number is. one thing which we have had on the spending side has been completely asymmetrical. point cut spending. health care is another good example. we have universal coverage, a variety of subsidies. it was supposed to be the key to getting the deficit under control. unless we go to this we have no chance of the deficit and looks

like -- >> i agree there is a moral issue about healthcare for americans. i agree with that. if you look at the way the money that seems to be on its own but the easy pickings particularly with -- for nothing is easy but all of the viable ways of raising revenue and going out the door. what obama and his team do for the next three years, i don't know -- >> in your view this makes the problem -- >> if you have questions why don't you start moving to the back? go ahead. >> are am not an american. i have the disinterest of the ignorance of an outsider and i want to change the focus a little bit. all of you keep saying only a

crisis will change things but we just had a major crisis. eight million people lost their jobs. we have below trend unemployment for five years. the question is what is the lesson we draw out of this crisis. one lesson ought to be a certain -- a certain market fundamentalism has been discredited that government comes to the rescue when you need government. if the united states can draw the lesson that less government is not necessarily good government, you need more and better government. unless you get that ideological or the level of ideas into something moving in that direction the whole system thing is not really soluble in the long run because any discussion today or yesterday is like reading taxes are off the table so we are only talking about -- >> i'm not sure i follow.

more definite -- more government and the deficit worse. >> we had to do it or unemployment would have been 20% reaching the great depression. what is the narrative that comes out of the crisis for the average american in terms of what does it say? >> who wants to take that on? >> maybe it will take a crisis but never underestimate the ability of congress to create crisis. [talking over each other] >> i want to respond on understand your question but i don't -- i would not rule out that this crisis hasn't brought about a discussion that wasn't really moving forward. when you push the federal deficit to $1.4 trillion and i am not disagreeing there was no need for this. in 1987 the stock market crash,

we were talking about reducing the deficit. >> blasted ministrations at 9/11 which enabled it to say fiscal discipli world. >> the reasons for increasing the deficit in order to stable a horrendous outcome. >> maybe it was time. >> this crisis, restoration of strong -- in a downturn you need to have a large amount of federal deficit spending. there are those out there who think we haven't gone far enough and the second piece in terms of denial on the deficit side is next year we will spend on job creation because folks will say

rather than attack the spending side we restore the american economy so revenues returned to their historic levels. the lesson of this crisis that goes automatically to the deficit side leads to a certain form of denial for another year. >> not any crisis will do. it takes a certain sort of crisis. >> every good discussion should circle back to where it began and i would like to take us back to the first panel we had yesterday. the unattractiveness of the political strategy of increasing taxes in this and many other countries for the last three decades. my question for the members of the panel is i am interested in the bipartisan approach that is being discussed and i would like to hear each of you tell me what the bipartisan package of tax increases is today that will pass the congress and approximate the magnitude of the

trillion dollar structural imbalance which was just discussed in the panel. >> i want to clarify your first comment. you talk about the attractiveness in the increase in taxes. for three decades we had a stable taxation. >> stable isn't increasing. stable is stable. >> i misunderstood you. what is the tax package going to look like? the last panel thought we might get 25% of federal spending which is optimistic. what is the tax package that pays for that? >> i believe congress knows how to raise taxes but they are not going to until hell freezes over and they are forced to make choices. am i going to cut clothes or

raise taxes? that is the situation that in their wisdom they will find a political bible to raise taxes. >> i wasn't here yesterday so it is hard for me to turn back. my thought is number one, whenever the gdp gets above 60%, i think that there will be a need, if we don't turn this 11% annual deficit down and get back to sustainable even 3%, i don't want to go to the taxes because i don't think it is a tax problem as much as it is a spending problem. the discussion we just had, unless you are in that box, i need to save this. if it is taken off the table through this health-care reform,

i don't care. there is only so much you can get out here. i have to tell you i am afraid in this country. that is an open end -- i am up into the 30% range gdp. >> anybody else? >> we have a tax increase coming next year. it is sitting there for the president. all he has to do is veto it. it is a couple hundred billion bucks a year. >> that doesn't get us where we need to be. >> if you don't do that the question is from the republican side if you are going to sit down you have to talk about the spending side. there is an assumption that we have to raise taxes for all the programs we have done. anyone who has gone through the federal budget on a regular basis knows there are fast

sluggers of sludge. any pruning -- i don't think you will prune back but you can slow the rate of growth. we did an entitlement -- on the discretionary side, the president sends something on the congressional reside, the congress goes ahead and adjusts. there are ways to do it. we have put entitlements -- republicans are going to need to see something on the spending side before they go to taxes especially since we got a large tax increase next year. >> there is a bit of complacency here where we rest assured that in the face of a crisis congress can come together and legislate. congress -- i like to think of a

legislative body as institutions that encourage and require consensus building. in the absence of the ability to come to consensus about what needs to be done prospect of un governability rears its head. to cut spending, the ability to raise taxes. failure is not an option but i think it can happen. >> i am a professor. john talked-about congress doing things responsibly. francis talked about how easy it is to be attacked. we are in a district where our congressman is quite vulnerable and every time he seems to make

a move we get bombarded with television commercials that appear to be from organizations that are quite non-partisan until you start looking into the web sites they come from. the two that are prevalent, one is an organization that looks like an alternative to aarp which ends up being an organization where money is funneled through a pr firm. it gets its funds from the pharmaceutical industry and another one looks like another nonprofit organization by its web site. you go to that website, it is a domain name bonet by another pr firm who gets its money from the

tobacco industry. we are bombarded not knowing where this money is coming from which appears to be coming from a non-partisan group which obviously is. it is difficult for congress to be 8 responsibly when some money -- so much money is being floated around. >> for many years there was a check on negative campaigning because you knew if you launch the negative campaign it could backfire but when it is done by amorphous groups and no one knows who they are the dynamic is different. >> you could be living in little rock where all you see our health care commercials and it's wonderful life. that is an inescapable part --

>> is it inescapable? we have the first amendment. >> transparency -- read the first amendment. >> congress shall make no law respecting the establishment of religion, prohibiting free exercise thereof or abridging the freedom of speech or of the press or of the right of the people peacefully to assemble and to petition the government. >> can you require them to say something about their funding? [inaudible] >> i forget when it happened but we had been fondled which unleashed this and the conservative side said you are going to weaken the party's. parties represent a structure by

which they compete -- they will not know the origin of this money. you will take politics down a side road. >> it does raise the question of unintended consequences which were just as present in budget reforms as they have been in campaign finance reforms. >> i want to point out that in my peak earning years the government was not afraid to increase tax rates which i was playing in order to pay for wars and several things. we had a war now for quite a few years now and all that has been done during that time is to

lower taxes. the word tax has become as obnoxious as the f word. i urge congress to consider the fact we have to look at the income side of the budget if we don't want to go into a major inflationary period or completely lose the american ability to barrault and exist in the modern world. >> that is true. our ability to act responsibly. the elephant in the room is we are in nation of scarcity. productivity, technology, expectations all collide to make

it difficult for our leaders to reconcile these competing demands and when you add the previous question about the perfection of partisanship and the divides in the middle of congress, that makes it hard to do these things. it is really the fundamentals of where civilization and progress is in many regards relative to expectations and demand that makes it difficult for our leaders to act responsibly. >> i agree with you. i think we should pay for our services and we got away from that. we borrowed to pay for the always believed that entitlement reform and tax reform are inextricably linked. to the commissioners sitting here. i think the next round should be -- going back and looking at the

whole tax code. that could be made a lot less disruptive to the market and at the same time a lot more efficient in raising revenue. we haven't been willing to put tax reform in this discussion, talking about raising taxes or marginal rates. >> another question? >> this is for mr ronald who has taken the position that the bigger the majority the less the partisanship. now the democrats -- maybe i misunderstood you. >> a chance for less by partisanship. >> as i understood it, in the 70s and before, where the

democrats had large majorities -- >> it was not as intense back then for some unique reasons. >> how big do the majorities have to get for this partisanship to diminish. since the democrats are in substantial majority in both houses will we get there and if so, when? >> my view is the democrats have all the votes they need to implement their programs if they stay united. you would need in the present situation, i don't see the basis for increasing bipartisanship. both parties have their strategic interests and the republicans will make moves to

go ahead and regain some power in the 2010 elections. i think there's one psychological mistake, when i was negotiating with the other side i assumed they were acting good faith and i was acting good faith and there was a human psychological peace where you think you are right and the other guy is wrong and it distorts them. i don't see a large return to bipartisanship. the republicans got three or four seats which i don't expect, you will see more because they have enough on the filibuster and you have to negotiate with them. >> you talked about something important that i can end on. we are talking about bipartisanship but there is the fundamental question of

civility. tom kane told me that when he was a teenager in washington, his father was the ranking minority member on the ways and means committee, he said every sunday they would stop by their house and have a cup of coffee with his father to talk about the problems they face in the week ahead and ways they might deal with those problems. >> very good. >> has there been some basic decline in civility that is separate from this question we have been talking about of partisanship that may be part of this equation? >> there has been. we are all senate folks. when you work at the white

difference in civility between the house and senate. in the house they are on each other's throats constantly and it has to do with the rules. we don't need you. we can roll you. there is the forced mechanism to make them look across the aisle, that reinforces the civility and they get along better. >> looking forward, if congress is going to be successful there will have to be more bipartisanship. democrats are at their high water mark now. >> it is not going to get better. >> they need to negotiate across party lines because they can't hold all their ranks together to hold 60 votes, that is not something they are capable of doing. the top domestic priority -- even that relied on republican

votes. they need to do more by going forward after the next election. >> civility is an issue. we are a less civil society as a whole. anybody on the media side people will be blog you are getting now you wouldn't have gotten 20 years ago. we are a more wiseguy in-your-face society and that spills over into politics. >> i have to end slightly upbeat. i agree the civility issue in the years we're going back to hubert humphrey and george mcgovern, changed dramatically but i will never forget one night we finished a budget at 1:00 or 2:00 in the morning, nobody was around and going down the escalators to take the tram to the dirksen office building and there were two senators in

front of me, both elderly senators, both having trouble walking. one was helping the other hand it was jesse helms and claiborne pell. helping them get on the train. that still sticks in my mind as the type of senate that we used to have. i doubt if i would find that today. >> thank you all very much. that is a good way to end it. [applause] >> all this week get a glimpse into america's highest court threw unprecedented on the record conversations with ten supreme court justices. >> once we hear the oral

argument we go to the conference room that week and we sit around the table and we talk about it. no one else is in the room and we vote. >> tonight our interviews with associate justices stephen br e breyer and clarence thomas. and our original documentary on the supreme court on dvd is part of c-span's american icon collection including programs on the white house and the capital. that is one of many items available on c-span.org/store. in look at tributes paid to u.s. and world leaders including the dalai lama, ted kennedy, ronald reagan, walter cronkite, colin powell and robert byrd. new year's day look at what is ahead for the new year. russian prime minister vladimir putin discusses his future from his annual call in program.

the global economy, the creator of the segway and co-founder of guitar hero on innovation and a entrepreneurship and the art of political cartooning. c-span's book, abraham lincoln, great american historians on our sixteenth president. it is a unique contemporary perspective on lincoln from $56 depending. analysts and writers from his attorney years to his life and the white house and its relevance to day. in hard cover at your favorite bookseller and digital audio to listen to any time where digital audio download are sold. learn more at c-span.org/lincolnbook. >> less than a month to enter c-span's 2010 student can contest. top prize, $5,000. just create a five to eight minute video on one of our country's greatest strengths or a challenge our country is

facing. it must incorporate c-span program and show varying points of you. winning entries will be shown on c-span. don't wait another minute. go to studentcam.org for rules and information. >> american university, the campaign management institute. sarah simmons was the strategy director for the john mccain presidential campaign. she will be talking about absentee and early voting. the first session at the campaign management institute at american university. part of our coverage this afternoon. the group will hear about cam 9 -- campaign finance. we will have that for you. this session should get underway shortly on c-span2. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> okay.

alright. hello. hello, everyone. welcome back to american university's campaign management institute. we are very excited to talk about absentee and early votes which wouldn't be very exciting except for our speakers. this is sarah simmons who served the john mccain presidency campaign. arnold schwarzenegger campaign which i know you will talk about, she is a graduate of american university and a personal friend of mine which shows that bipartisanship can exist in washington d.c.. let them have it. >> thanks for having me this morning. i want to say that if you are serious about working on campaigns, this is the best piece of education you can take with you. i occasionally -- you have better bound books than we had in and 90s. i occasionally go back of i am stuck with a task i am not familiar with to review the

course materials i had. there are a lot of great speakers that come through here, people you will remember for a long time. i will talk about making voting work for your campaign. part of what i am going to talk about is from the arnold schwarzenegger example. the john mccain campaign may have the worst reputation compared to the obama votes. some of that was funding, some just the regular challenges our campaign had that was more global. it was not specific tactical things. i have some good examples from john mccain about why early votes helped us make different decisions or inform us on things we did that may not be logical. but why we made the decisions we did. had the tides changed the way we hoped it would work to our

advantage. i want to tell you what the tactical things are that you can do that will work for you. 40% of the vote will happen before election day. almost half of the people are voting before election day, this will impact how you deliver your message, whether you put something in someone's mailbox for a volunteer tries to contact them or you put radio commercials up, all those things. if you underperform, you can lose an election on the margin. one of the things the bush campaign is famous for is turning known supporters into early voters. they did what we called banking their vote. we tried to get those people to vote early so they knew it was in the bank and there was nothing last minute, a bomb drop was not going to affect those

vote because they were already cast. in a close race you could impact the composition of the electorate. the makeup of the voting population in your favor. our california model, one of the things we do is the number of republicans who voted in the election, predominately the majority of the electorate in california is registered not with a party. we are trying to move the number of republicans up from 33% to 35%. if you move that up by making more of them vote than anyone else. if average turnout is 60%, if you turn out 75%, you will change the composition of the electorate. does that make sense? that doesn't make sense to you? i didn't mean to pick on you. banking your votes early, make

sure your operation is more efficient and easier. if you know you need to turn out a million households on election day, you can get 250,000 of them to vote early, that is fewer doors you have to knock on or phone calls you have to make. you decrease the universe by $100,000 that you can put on tv or if there is a group of voters who are getting shaky because their candidate said something inappropriate to a woman. it changes your resources. on that same line, things happen. votes are cast before they can do something detrimental to themselves. say you know there's something out there. if you can get those votes passed before that piece of news drops you can limit the impact

on your campaign. this is one of the areas that is most interesting. if you are on top of the race, one of the things early voting can help you do is encourage the hotel affect. part of what we were able to do was help republicans across the ticket because when we were trying to change that electorate we were able to make it easier for people. we turned out 90% of republicans or 65% of republicans, we turned out all those voters, that makes it easier. of the republican has a ballot, more likely they can check that box as they erase secretary of state where in the grand scheme of things when spending $90 million on tv you might not

know who the republican candidate for commissioner of insurance or statewide elected official who may not have the resources to put up a lot of television commercials. does that make sense? alright. this is california. i have been doing a lot of international presentations. this is on the left of our country. california is an aggressive vote. is not oregon or washington. it is everybody. it is not that dramatic. there are counties in california where the entire county votes by mail. when you are looking at these places down here, huge numbers are voting by mail.

some of these places the digital not a lot of people -- 321 voters, that is good because they all know of a vote by mail. if they need to communicate, that narrows down the window of when to do that. it doesn't make sense to do tons of commercials because they have their ballot for six weeks. one of the things you need to pay attention to is the most important thing is getting your name on the ballot. the research you are going to do -- state law really matters. state laws are very liberal.

you can change how people vote. that is 40% of the electorate. they will vote by mail or early. in terms of making them vote early, one of the things you need to know is the eligibility to vote early. you don't need a reason. most places are going that direction but in virginia you had to be out of state or have an excuse. you want to know when people register. anyone know you might know when people will register to vote early. when you are going to have volunteers go out to register people to vote early.

why might you want to know the votes to build the register? [inaudible] >> you have talked about direct mail? you will not know the answer. part of what you are going to want to know is the register of voters or county clerks, the largest universe of people who are early voters. it will be a data question. you want to be able to say every person we know is voting early. when are we going to make these crucial decisions? when will we know how big that

file is? california, as easy as it is to become a voter, you have to follow pretty specific guidelines if you're going to register voters. you need to make sure you sign back in what you didn't use. all those things. you want to know how you'd do it. set up a table in front of the grocery store or identify your organization, and someone a piece of paper. when can you start ignoring groups of people, all the way through election day. you can walk your ballot in through 8:00. how long -- do they have to have them in the mail by a certain day because that will affect what you tell people.

we know you got your official ballot, joe need your vote or arnold schwarzenegger need your vote, phone that in today because if you don't it is gone. when do ballots have to be returned? how can they return them? can they mail them in person? some other person collect them. in oregon anyone can take them in. do you know that? it is possible you can send volunteers to turn these in. in a lot of places that is not legal. in other places it might be invalid. i was sitting in headquarters in california and sacramento and very rarely was spending my time in the neighborhood with my volunteers saying don't touch that ballot but every time i talked to my staff 70 people on

the field, we drilled into their heads that if you touch a ballot you are screwing up the system. tell your volunteers -- the second most often thing i said was if you're caught with beer in your car and 65 of our opponentss sign i will fire you. i mean it. that is what you need to keep in mind. how does this impact building a strategy? the best thing you can have in politics is a strategist. it also means nothing. it is kind of fun. you want to think about every aspect of the campaign. your message timeline and delivery, every campaign thinks this out. the first thing we are going to do is go into some issue positions and a series of rollouts. plans on taxes and how to fix the budget mess and what is he going to do about puppies and

rainbows? then we start tracking our opponent. this matters because you want to make sure people are getting the right information when you want them to get it. if you wait until the last five days of the campaign to say my opponent was a business partner of bernie madoff you might think about that if people are not going to have their ballots and the voting. the second thing i want you to think about is a identifying your voter groups. who are these people who are going to vote early? is it a state like california where you don't do anything about it? is a state where you have to register people every year? what kind of people might vote early? democrats are really good at going after senior citizens. i like the background noise.

democrats go into a senior citizen home and you have a bunch of people who are not able to drive themselves. those might be good targets to have vote early. i saw a great program in california of young republicans and professional women. if moms are a great group of early voters you think about the average mother's day peepers little they get up and make lunch and feed everybody breakfast and load the kids into the minivan and have ten minutes to get one kid to day care and they go to work for eight hours and on the way home stop at the grocery store to get dinner, pick of the little one from day care and meet the other kids at the after-school place and find their junior high school kid. get home and make dinner. there is no time to squeeze in a voting. they did a handwritten letter campaign to very targeted women

and found women who work outside the home and have kids and targeted them to be permanent voters'. is really successful. not only did we get them to register but they attract the whole thing and 95% of the people they registered voted early. you want to think about your plans to call these people on the telephone. all you -- affected by who votes early. polling. can anyone think why we would care about pulling in the early vote? go ahead. [inaudible]] those key supporters who are going fgoing.

>> to exclude them from the sample. >> yard getting any good point. is your early vote behavior like the rest of the electorate? this will turn you ono getting . is your early vote behavior like the rest of the electorate? this will turn you on to if your opponent -- we were freaked out about a lot of stuff but that was something we were concerned about. democrats are much better at this than we are. this is not something our volunteers are accustomed to. we watch the polls every day to see if there was a spike where you look at the people who are

early voters and election day voters. is there some differential? is there a difference in who they are supporting in the early vote? why else would that be important? go ahead. >> if you are looking at polling and where early voting happens and you see 50% and you have 50% of half of those votes you know what your target needs to be. >> you don't need to make it up. if you are ahead this is as much of a butt kicking as we can afford or if it is not worth it, this is what we have to make up. >> in the same vein, if you determine strong support among groups that the vote by early mail, young people or so, you

can concentrate on absentee ballot efforts. >> that is the problem. if we think seniors are for us in the early vote and no one is voting early and they are voting for someone else. that is a light bulb moment early enough to do something other than the day after. on the plane on the way home from phoenix no one said bomber but one person -- you don't worry about the last -- should have been someplace else. i went and threw up. i don't know how much you are talking about this but legal strategies. ohio is a place where the election day is a place where you get these voters, a bunch of lawyers, and the sure they stopped judges from doing dumb things and make sure polling places are operating as they

should. make sure you are not seeing a voter irregularities. this is very much opposed to thousand. these teams of lawyers are ready. ohio is a good example. people are registering and voting. there is a very broad set of circumstances where someone was able to register early and vote on that day. we were concerned they doing it -- you can do a ton of anything. we went to make sure our lawyers were there. this is the second best thing to your voter file in terms of campaign planning, calendar. when do we need to start recruiting so we have people who are ready to go? it won't happen and there will be voting places where it is happening weekly. there are some ideas as you are right in your campaign plan and. some things to think about so you are ready to go.

i included this chart. i am doing some work on someone who is running for governor. the great candidate. we were having this back and forth about the early vote. he said i want to know when people vote. when do we start delivering these messages? the early vote, we have to start earlier. i don't know. we said ok, what happens is may 10th is the day that people will get their ballots. the immediate week after people get them, 7% return their ballots. then it is a slow climb up until may 31st. a quarter of the people vote and then half of the people cast their ballot. it is important to know what

this trajectory is. this is california where it is becoming had that for people to do this. they hold their ballots longer than people anticipate. this is another thing to think about. if you are seeing it is not matching this something is going on. you need to figure out what that is and why it is happening. that was interesting. this is your normal time line. you start quiet and as you get close to election day you are crescendoing so your delivering the most messages, pound per square look inge, yinch, you ar trajectory.

fabulous graphics. different from the al gore movie. i want to talk about voter policies. this is really important. voter files are the most boring things to talk about but the most interesting things to work with. i am a total data nehr deke. i built the voter files. it is really boring until you start to use it and then you use it and it is very dynamic and helps you strategically. when you talk about direct voter contact, part of it is going to be turning out to voters. you do things they you would never do on tv. to you ever look over your

interesting campaigns? you see mail pieces that are like -- holy toledo! no one would ever do that. the first campaign i ever ran was in a virginia. do you know where that is? my very nerdy family asked how you ended up in the south. halfway between d.c. and charleston, a strong community, a small town. people ask me where are you people from? detroit. detroit, virginia. never heard of that. high am running this campaign, 25 years old. i don't know of from down but i'm figuring out and we're getting beaten in the primary.

i did her mother's back surgery, door to door. i don't care. let's go. anyway. a really nice guy but kind of moderate and pretty conservative in the republican primary and our opponents was a right wing w wackadood wackadoodle. he had his grassroots people who were totally organized. every day in the local paper there was a different letter about how he was going to raise taxes and none of this was true. he wasn't going to be a speaker even though he was pro-life and anti-tax. he was right on all the stuff but it wasn't his style. every day you would read the paper and we are getting the crap kicked out of us. some guy opens his door sobbing.

this is kind of weird. he goes do you know what is going on? we said know. there were these kids in colorado who went into the school and shot all these kids. totally horrible. it was columbine. these kids were in second grade or something or not even close. please tell me it was at least junior high. it is not really appropriate to knock on doors. we had a forum, we walked in and it would be 700 people from the evangelical christian church and four people from the country club and they would be cheering for the other guy asking outlandish questions. i was sitting next to the

governor of virginia. one of these guys was there. why is this a better campaign? somebody asks him about columbine, what would you do to keep this from happening in the future? if teachers were allowed to carry guns, something like this wouldn't have happened. of course in total bunker mentality, he is going to say something on guns that people shouldn't be carrying guns -- this hold gun thing totally going over my head that he ted -- he said teachers should be armed. no one thinks that. everyone has at least one teacher who -- i really wanted the gym teacher or a shop teacher packing heat. i would have been dead. he really said that. i don't think so. i don't think he really said

that. now there is a dispatch reporter who is 125 years old and still writes. his name is something like tyler whitney. a real southern guy. he says it again. he really said it. i have to ask. do i understand him correctly? he said it last night at this other forum. he goes and writes about it. we have it on paper. this is fantastic. we have to say it one more time and then we will use it. it is really in my candidate's backyard. you only have to drive two blocks and will be fine. i am handing out shrimp cocktails. there are a bunch of -- really her bridge buddies and stuff. all of these moderate republican

women. another reporter asks -- he goes further. every teacher should carry a gun, the only way to protect our kids and a room -- country club women -- there was a moment of a total vacuum because everyone gasped. the reporter stands up and walks out. i'm very calm least that they're trying to have my poker face which i am sure was like this. we designed this -- it was so -- such a reaction, so much more so on cable-tv and all the stuff. we had one piece of mail that had a big hand gun on the front and our opponent's name was mike shar charm charmin. this is something you could

never do on tv. if you did it on tv it would be what is wrong with him? we did this in a rural area. does anyone know the difference between mail delivery in a rural area or a city area? can you think of the difference? they actually have a mailman. the opposite of that. in the rural areas people have a post office box. in a rural farm community people go to the post office at what time of day? really early in the morning. as i found out. that morning i was running late. i got in at 8:45 and the phone was ringing. the only person who calls me is my campaign people and they know to call my cell phone. i picked up the phone and it was -- i can and understand the person. they are hysterically screaming at me about how could i do this to mike charmin. this is an atrocity. what are they talking about?

all of a sudden, he said this, we have a three newspaper citations. i am sorry you feel that way, i hang up and your voice mailbox is full. 700 messages from all over central virginia. about how atrocious this was. i will say that that election was 3500 people voting in the republican primary. 25,000 people voted in the republican primary. you can do things in the mailbox to the right kinds of voters because the file -- the whole other thing on direct mail. ..

these are who, sometimes get confused but, tuesday in november where you're supposed to vote because it is about the only presidential years or got fused in is municipal election or primary or, say they're working on a bond or other type of issue. low pensty voters are not people who vote every time. you will need to spend a lot of energy to turn them. these are people who you know support your candidate

or your issue. third target audience are potential early voters. senior citizens center where somebody might not cast a ballot unless somebody helps them or do a targeted program with moms that work outside of the home. find potential people to turn into early voters. last thing you want to think about persuasion universe. two separate things and early persuasion universe and an election day persuasion universe. to give you a little bit of visual on this, so you have your voter file. it is a big block of all yourers. this is the favorite part of my presentation. so the second thing you have is people who vote early, just broad, people who vote early. next thing you want to think about is, who are your candidate's voters? that divvies up a little bit further down. so traditional early voters that support your candidate, your low propensity voters. so again, you don't have a really do a lot of effort to turn these people out.

you don't the are not going to be early voter and, you're going to have to turn them into it. these are high effort kind of cubes. your persuasion universe, the early part of your persuasion universe, and your election day. election day and early part of persuasion. that is split up into two separate things. who are the people we're going to try to talk to, you want to divvy up the voter file this way. if your block is that much covered by people who vote for you, you win. okay. i'm going to show you, this is broadly what we did on the campaign and what we did close to mccain. at some point i had paying attention to mail and phones because we were changing our television every 24 hours. so that was effective. pardon?

never mind. >> [inaudible]. >> no. interesting like post-election. people what would you have done differently. i remember so many times between like the beginning of the financial melt down and when things started to stablize i thought, why did we do that? it was such a crisis i think we probably think that some days about elections we've lost. sometimes it is good to lose because you learn a lot. so early voting requests. what we did, we mailed three requests to our broad universe of supporters to vote early. the short case, every republican got three requests by mail and three follow-up phone calls to register as early voter. so we divvied those up. they got three requests we may have done 10 or 15 different pieces they got three requests on specific topics. we used micro targeting, data file and we knew who the people were. our opponent will raise

taxes if you don't vote early your taxes will go up. this is really important vote. then they got a phone call. the other we did volunteer specific drives like i was talking about with women. okay. so i want to truck a little about time lines. this is another fascinating graphic. stolen directly from a, xcel spreadsheet i used to manage our mail program. you see that the first week in october, this is when absentees, the ballots dropped. you see, project number 2-a, 3-a. 9-a. what you can see we basically divvied up. this is all our persuasion. we divvied up into two universes. i'm not trying to make something more complicated. what i'm trying to say this is simple concept a lot of people don't do but it is really, really important.

mail piece 2, with un2-a and see unverse 2-b. 2-a dropped first week in october. 2-b dropped second week in october. you're staring at me with blank stares. you're trying to make this complicated. this is not complicated. when you're thinking about mail universe, go through identify who votes early and who votes on election day, split them into two groups and create two different drop dates for your mail. not complicated. but, people look at this, why is it so complicated. it is not. we dropped the 7th piece the second week to early voters and we dropped it the third week, you know down here to election day votedders. and on and on and on. not complicated. people in california this is the first time anyone ever done it this way. then you're just dumb, right? trying to point out, this is really, really not complicated but a very important way gosh we can divvy it up make sure people

voting early are getting our messaging early. and people voting late are getting our messaging late. okay. traditional early voters, again, this is, your persuasion mail should drop prior to beginning of early vote. in states where early vote is happening by mail you can know the exact date when voters cast their ballot. did you guys know that the? another fascinating part of the data world. can buy from vendor will collect it for you. you can have volunteers collect it for you from county clerks you can get list of people who already sent their ballot in. same thing you do, you guys talked about election day operations where somebody stands or you done it at volunteer, stand up at voting place, they call out john smith's name and call john smith off precinct list, on and on. you can start that with early vote. why is this helpful? we talked about at beginning, why is it helpful to do this? >> saves money -- [inaudible] your supporter already voted,

you don't have to focus on that person anymore? >> right. you have ever shrinking universe of people to turn out as soon as somebody casts ballot. you sleep easier. john smith voted. i'm so happy. all right. everything is, an effort to make people vote as soon possibly as soon as they have their ballot, right. volunteer activities minute ballots drop, our volunteer stops i.d.ing people and stop trying to recruit people. they only call list of people who have ballot in their house few weeks bug the crap out of them to send their ballot in. i know we talked to you 18 times. you still have not voted what is wrong with you? they had a script that didn't say that, that is pretty much what they were saying right? again, tracking the data so you know the exact date when they have their ballot and number one objective make sure they turn it out, turn out and actually cast it. in-person voters i think obama campaign kicked our butt on this effort.

it can be a volunteer activity t can be paid, it can be coalition-based. somebody said students before. mccain students effort was pretty sad compared to the obama student effort. so i mean that is something where, on a campus, very easy to tell people where to vote. very he is to arrange rides. large group of people who you know support you, kind of like not very specific targeting but kind of broad targeting. wow!, we're winning 85% of voters under 30. let's go find. they all live this. come get in our car and go vote. even if you turn out a bunch of people, take some people, drive republicans to the ballot place too, you're mostly turning out your voters so it is a really good effort. most important thing understanding what you're allowed to do. i don't know, in year 2000 you guys were all still in elementary school, right? no. not you? makes me feel better. i will now only speak to you. in 2000 i was working in wisconsin, another near

victory. we lost, i was working for bush campaign and we lost there by 5,000 votes. one of the things that was really interesting in the early voting stage there was actually very broadly published national story. a woman from new york, manhattan social item, went out with the campaign and gore's campaign handing out cigarettes to homeless people which was kind of awesome for us. best news story. handing out cigarettes, loading these people into vans, driving them to voting place and casting early vote. you can't give somebody anything more more than a dollar. best part about it, it looked so, so fabulously, tabloid, she was in fur handing out cigarettes and interviewed her outside manhattan apartment. i was trying to make homeless people feel better. or you were bribing them. making sure you know what you can do. you can give somebody a ride but can't pay them. give somebody something to eat but not over a certain dollar amount.

make sure you know what you can do to drive somebody to the polls is important. okay. i want to talk a little bit about polling because we talked about it broadly before i want to make sure you understand this. the example i like to point out is, we are in the waning days of the mccain campaign and trying to figure out where we spend our resources. numbers started suddenly looking good in colorado. we went back and looked, i can't remember exact numbers but we ran the math, basically figured out because of early vote and how bad we were losing early vote, too many people had cast their ballot for the remaining number of voters to overcome what we were already losing by. everyone, colorado numbers are looksing better. people already voted in instant push button polls like rasmussen and those kind of things every day, those numbers were looking better. if you already voted you weren't answering poll question. all was left, six old ladies who live in aspen going to vote for us. so we were, we actually pulled plug on colorado. it was really controversial.

a lot of reporters asked us. ly state you have a chance in. we knew we couldn't overcome that challenge. in terms of strategic thinking on a campaign allocating resources last minute that isly important thing. that was probably a dollar a week, expenditure on television that we pulled. we got to, drive it into ohio where we still have a chance. wrongly but we still got a chance. you have to be able to laugh about it. intention to vote early. this is important before somebody said, part of why you use polling information to do this, identify what kind of people are going to vote early. even on your earliest surveys saying do you intend to vote absentee and intend to vote early, it helps you because what kind of voters are likely to vote early. what kinds of people can we target our message to vote early. where are places we do specific coalition-driven drive? is there someplace to get hispanics to vote early because of a issue they care

about or some way they're all grouping together in a survey. okay. ballot question, and i have a little example of this, as you're approaching election day, will identify how much you have to do on election day. do you have a significant lead or not. are you behind? what do you have to do? so, all right, so i did sort of a fake, fake math here for you. made up all these numbers. so this is not actually taken from anything real. say 42 of the vote going to your candidate and 42% is going to the opponent and 18% undecided. this is sometime during early voting. early vote question, 25% of people have cast a ballot. 75% of people have not cast their ballot. neil is here. i saw him when i was watching c-span. he is my old boss. all right. one of the things your cross tabs will do, split out. you will look at ballot score between people who voted and who haven't voted. of 25% who voted say 38% are

voting for you and 62% are voting for your opponent. so you're way behind. of 75% who haven't voted is reflecting your major ballot score, 42-40 with 18% undecided. so, now you can map it and, so you're behind, right? your opponent has 15% of the vote of what, trying to get to their 50% plus one. you have about 10% towards 50% plus one goal. you want to know how we figured that out? who is the math whiz. want to tell us? >> i have a general idea. >> want me to tell you? i'll tell you. >> i don't know if i want to go you there the math of it, but, if you have the 38% of the 25%. >> you're right. >> so, i'm trying to do the math in my head. >> i already did the math for you. 38% of 25% is 9.5. and 62% of 25% is 15.5.

does that make sense to everybody? so that's where they are towards their 15%. you're six points behind now in the real poll in actual election. you're kind of getting your butt kicked. figure out what it really means. remaining 75% of the vote which luckily is big chunk. you have potential getting 4% vote you have 1.5% towards your 50%. that puts you 41%. your opponent is still winning with an additional 30%. they're going to be at 45%. this is really important thing to think about. oh, my gosh if the trend keeps going as it is only winning 2 points overall, that is not enough. you will lose by 4 points. you will be really mad. so this undecided is much bigger factor, 18% of what is left is 13.5%. how that 13.5 breaks down will be really really

important. can you identify people specifically in the data file? can you do specific phone calls to groups of them? what do those voters really care about? is that a message you can use to take over? do you need to attack your opponent with those people? what do you need to do? this is a big strategic point, right? you're losing, even though, you open your cross tabs in the morning, still up by two. looking good. no, actually you're losing by five. this is important thing it think about. wow!, what does it do and what information does it give us how we inform our future actions, right? this is just the math. i wanted to show you how we did it. this is cross tabs. 25%. getting your butt kicked on election day. winning by some. here is our math, right? so if i do 25, 38% of 25 is your 9.5. 4% of 75 is your 31.5 is gets you to 41.

62% of 25.5%. it is 15.5. 40% of 75% is 30% gets you to 45. that 13.5% is make-or-break. does that make sense? i tried to do a little remedial math. i think if you explain it a little better and see cross tabs you might, you might be able to redo the math on your own. okay. so, tracking systems are really important. updated data is your friend. before i said either buy this from a vendor. have volunteers go collect it from the county clerk. you can have staff go collect it from the county clerk. set up some system where someone on your staff calling getting data downloaded every day. good news about improved technology broadly, one of the good things about even the, way voting has changed, federal laws have changed what states do this is a lot more electronic. which is good then you're actually matching voter i.d. numbers and knocking real people out rather than, when we first started doing this,

well, john smith who lives on elm street, is that elm street in arlington or alexandria? is that a same john smith or different john smith? you can identify this really well. you can track people you registered as you're going through. you know you registered somebody because you have that some spreadsheet over here. you can knock out when they voted. small election you can do it on your own pc which is helpful. okay. you're going to be able to track those who will cast their ballot early. people you've identified because you made them do it. people already registered. figure it out. this will save energy and save money. you can do it in, in california we did it with just a vendor. we sent the download every day. matched up files, kicked it out and new group of people we're calling. comes easier and easier as technology gets more up-to-date. okay. so i legal, i want to make this point. know what the law is. go do research on that.

figure out exactly what your people can do. what paid staff can do. have observers ready to go. plan out when you need to start having legal teams go stand at voting places make sure things go the way they ought to. double-check with big localities for a small legislative race, where do all the people live? where your voters are going to be or where your opponent voters might be. make sure they're following the law in those places. make sure your voters have access where they ought to vote and make sure in your opponent's places they're leting people vote who not vote. republicans get a bad rap. it all too many times day after election wisconsin in 2000, next day we got 5,000 phone calls from voters reporting things that were weird or funky at their election place. well, too bad it was day after, because we couldn't do anything about it. only recourse you have in a lot of states going in saying we think 10 people voted illegally and reach in and pull out 10 ballots. that is not really, that may or may not be helpful. only way to make it helpful

go to places where all of your opponents voters vote. in george bush, wisconsin, gone to inner-city milwaukee where mostly african-american voters and disenfranchised people. wasn't going to be winning strategy broadly. wasn't what we wanted to do. being prepared with lawyers present in the place where you can say that person, that specific ballot needs to be marked some way suspect gives you lot more recourse after the fact to do what you need to do if there is contested election. so that is my presentation. everyone appears to still be awake. i'm looking this as a grand success. what questions can i answer for you? >> assuming keep legal staff on retainer for an election cycle, how much would that cost for a state election like u.s. senate race? >> you're going to have a legal team on your campaign probably on the mccain campaign, we mccain campaign we had six lawyers worked

for us full time. arnold schwarzenegger campaign we had only lawyers on retainer. i don't know what they made to be honest with you. we had two lawyers on retainer with us. most of those legal teams that will go out and do it as your observers on election day will do it as volunteers. it is going to cost money to house them. i think, trying to, should be able to remember i think we had like $750,000 budgeted for like the last wee three weeks of the campaign for arnold schwarzenegger. that was like to house people. people rental cars and flights to go out and be that band of people but they actually worked for free. you want to figure out how many lawyers you need and what it will cost to house them and transport them and that kind of stuff. they won't do it, they want us pay their own freight but they will do it as volunteer. yeah? >> you deal with sent tee ballots rather than, vote by mail ballots. in new jersey, for example, they went to vote by mail

where anybody can vote by mail. previously you had to be disabled out of the state in order to vote absentee, do you treat that the same way specially people aren't necessarily living in the district at the time? >> i think there are two things you need to think about. it is resource allocation question really. if you're in a state where voting by mail or voting absentee or in person is hard you want to ask yourself the resource allocation question. does it make sense for us to spend money finding 16 college kids or 150,000 college kids don't go to school in new jersey but go to school in delaware, new york, pennsylvania and washington, d.c.? that may not be worth your energy. it may be the kind of thing, may be worth your energy, more cost efficient than you think if you get a list of them. look at state law, figure out if it trace additional absentee got to be sick or infirmed or living out of state or military something like that you want to though from the secretary of state when is last date they can

get that stuff in so you can get a big file. you get biggest possible bang your buck. then maybe you phone calls and direct mail to them in way they get it. now you can do e-mail pens, get someone's actual information and send it out to vendor and get bunch of e-mail addresses to send them an e-mail. think of ways to contact them. maybe something specific. maybe a candidate is veteran, there are bunch of people and bunch of people, military people are voting absent tee. that can be really important voting bloc for you. so you will have to do, all this is resource allocation question. how much money you have. how many vote is this and right kind of voters to make a difference to you like i would have said, if we had the same kind of demographic profile who our voters were for mccain in a state where most of the absentee voters were college kids, i would say, screw it. i'm not going to spend any money on that, probably on either side, even if i thought they were all supportive, i might say,

we'll buy e-mail addresses nickel a piece, send them e-mail because they're all supporters and people can drive them to turn out. if i was running mccain campaign, those people aren't going to vote for us. unless i had some juicy piece of information like you know, our opponent, you know when he was in college he was a nerd. i don't know whatever. he wasn't cool. wasn't cool as you think he is. he is really bad at basketball. some piece of information that can change their mind. you know what i'm saying. >> you spoke about state laws that govern early voting are there any national regulations regarding early voting or all state? >> all election laws will be dominated by state law except central fund-raising laws are mostly federal pieces of law. you will need to know, secretary of state is going to be the dominant piece of, dominant place where you go for information about how people vote because constitution states are ones who govern elections. it will be manner in which

that's conducted will happen at secretary of state's office. so most of it is state. working state to state actually get, you become like a pseudolawyer because you, suddenly have to understand it all because implementing it all. a lot of it has budgetary impact. schwarzenegger campaign i spent more time, more of my daily hours on schwarzenegger campaign figuring out all contact with republicans went through the state party. when i did a mail piece had to figure out how many square inches were arnold schwarzenegger, how many square inches were rerepublican party. did i say vote on november 3rd or whenever the election was that year, voting on november 3rd, vote november 3rd this is federal election. that had to be paid for with money raised under federal limits. and then if it was within certain windows there is all sorts of other laws that govern how the money is spent. so you become, you have to become proficient at it because it matters.

knowing that said, i never said vote on november 3rd. i said make your heard because people knew when the election was. okay, more important to me that i don't have enough federal dollars to do what i want to do. how do i do what i want to do without using federal lawyers. i had really good lawyers were awesome at it. i think we actually, well, because of something we did they actually changed how you used to, we thought we could use state funds to registerers that is usually something state parties have to use federal dollars for. those are really hard to raise because you can only raise them in $5,000 chunks. california we'll give you million and a half dollars to the party. that is great money you can't use it for everything. what we did, actually registering voters is now, get-out-the-vote activity, party-building activity we're turning those people into permanent sent tee voters. we had our paid people going out to check the box, okay do you want to someone permanent absentee? once we check that box we

could pay for that with state money not federal money. it was strategically really really important because it made a lot more money available to us do a lot more programs. you have to have really good lawyers and ask a lot of questions. you have to assume there is way you want to get where you want to be. good campaign lawyers understand strategically where you want to be and help you go through that path. if anyone going to law school, become a campaign finance lawyer. there is not enough good ones out there. don't go to law school though. that is just my advice. who else has a question? have i bored you all to death? go ahead. >> any differences in persuadability in early voters versus election day voters? seem logical early voters made up their mind or more likely to made up their mind without being persuaded by mail or tv spot. >> i think 10 years ago that was totally true. i think in states where we're seeing majority of are voting early i don't think that is true at all. you know, use california

because where i have a ton of experience so i probably, rely on it too much. in that state 40% of the vote, many hadn't decided. i would say partisans that vote early, those people are already pretty locked in you want to make sure if you're going to try to appeal to them, you better have pretty clear path what you're going to say or it will be wasted money. independents are people most likely to vote. they're kind of a great universe because of their undecided and they also don't want to spend the time doing on election day, don't feel some big civic duty going in getting sticker and pulling thing. they're probably a lot more mall ethan you expect. but i don't have any data to back that up. it is an interesting question. go ahead. >> -- have you found there is any specific issues or techniques that are good at convincing early voters to get out and vote? like, are there specific

issues that motivate them to vote, that specific population more than other voters? >> well i would say, one of the things if you're working on a big general lek, part of how the money flows understanding how the money most a lot of those voter contacts will take place through your state party. you're going to be targeting partisans who are members, people who are members of the party, probably most. i mean, for us in california. i use california as my example again, because that's what i'm going to do, but in california part of the deal that schwarzenegger made with the state party to run, we ran $60 million through the state party, part of the deal he made we would specifically try to target republicans with money we raise understood the public can party. part of that was in 2006, remember what happened in 2006? republicans didn't do very well. it was really bad year for republicans. we had to appeal to this huge number of declining state voters people independent. they're not happy to hear

about republicans. so we weren't going to try to talk to them from the recan party. so we thought about who we're going to drive to vote early. we went to republicans. very conservative messaging talked about taxes. we talked about illegal immigration. there is ballot initiative that year, jessica's law. putting pedophiles on a registry and all that kind of stuff. what else did we talk to them about? we talked about social conservative issues. we talked about them what wrong with our opponent not what was right with arnold schwarzenegger because he is not so right on all those issues to that audience. really specifically tried to target those voters what we knew were third rail hot topic issues whether going after state voters with some murky message about, from the republican party that, you know, that would appeal to moderate voters. know what i mean? i think going to people, this is part of what your data files, because they may talk to you about micro targeting at all? part of micro targeting is

so great, when you say immigration to them, their hair stands up. now you know what to talk to that person about because they're really freaked out about it. so i can target the message specifically to them. really important that you vote today. just harassing them. that is the thing that really works. rnc did a lot of research between 2000, 2004, they figured out 6 to 7 contacts with a voter was kind of the number where you started to see increase in activity. there is reason why campaigns call over and over and over again. why you tell volunteers, yes i know they said if we call them one more time they're never going to vote for us why don't you call them two or three more times. there is reason why we do that. because it works. repetition is important. to the degree which you find issues that are agitator issues that helps too. yeah? let her go first. then we'll come to you. >> everyone is talking about microtargeting, seems like a really great thing but

steams like it can be very expensive especially with direct mail. i'm wondering the costs very like, sending out generic piece to everyone, versus microtargeted piece to some people and another piece to some people, what are the cost differences? >>? state like california, we spent $250,000 to entire micro target universe. 10 million voters. you can ballpark it from there yes, it is a lot of money. i think it is not, i don't think it is the great panacea but it is thing if you're within two or three points of winning an election it is what will get you two or three points. you have to be right on other 48% or you will not get over the line. that is part of analysis you have to do on campaign. if you're being tight on budget. sending general nair mail to entire universe me coming in

republicans are awesome. some you may agree totally. others would say no. knowing your audience is really important. you can target and i'm sure your mail people will get into this a lot more in depth with you and lot better than i can. your polling when you ask this guy is, thanks to the answer to health care obama health care plan. go into cross tabs look at difference what women 18 to 30 think, what men 18 to 30 think. what women 30 to 45 think. what women 45 plus think and use that as targeting model. if you don't have the budget to do microtargeting and mail program. other thing you can look at data file most places you buy it from they will have a bunch of data. they will say, gosh, can you poll people who, people who are known pro-life people from past campaigns who maybe identified, self-identified as pro-life person. go through and target some of that stuff out.

other thing you can do, is, geographic targeting for your mail. you know, if like local election or state election, if guy's tax plan were reenacted, people who own homes worth more than $500,000 would see 10 increase in their taxes. those are made up numbers. anybody who owns a home, that is worth more than $500,000, is going to get, will get beat down if this guy is elected. that all of sudden, that is pretty targeted message. go back and pull tax records from, state or county officials. go through and pull it by census block. a home is worth more than $500,000. if you have a good mail vendor they can help you identify based on polling as much on microtargeting. it is really, really giant survey. instead of calling 500 or. 1,000 people we call 20,000 people. you do regression analysis and people with common traits.

they have credit card data and consumer data. over time safe way or cvs card. people who believe this have bunch of other commonalities. they all drink dark liquor. drive ford f-150s or live in these kinds of places. those sorts of thing are identifiers that microtargeting uses some of it is pretty logical. wow!, people who like guns also like trucks. maybe we should get a truck list. go from the state and poll, a list of people that bought hunting licenses and send them orange post card. or maybe working with, on the left maybe working with aclu and pulleys of people with e-mail you do a lot of different things where people, membership groups will give you membership groups so you can mine communicate with them, on behalf of your members. when you don't have money, you think about what other things we identify to do our

own getting and modeling based on data you have. there is lot of data out there. i think, it is amazing candidate i'm working with in california is jewish guy and commissioner of insurance. commissioner of insurance is singularly the most boring thing could ever talk about. one of the things he did was go through and make insurance companies divest their interests of anything iranian. so we were like, okay, kept talking iran issue. what the hell does that have to do with commissioner of insurance. he explained it to us. now we've done series of targeted e-mails to people with jewish surnames or traditionally jewish surnames. we got open rate, is like 7 or 10% from data we've seen. we've had 15, 20% of people opening e-mails. small universe, targeted way to do it and not exact right. aish sure name may or may not be practicing. >> or have any jewish ancestry at all but

something we've done to be okay, here is a group of people who might be really interested in that one specific and yet bizarre topic. i love my candidate by the way. he is great. like, talking about what is he going to do? he doesn't understand the iran issue. go ahead. >> [inaudible]. >> yeah. actually one of the big measures that you use to see if you're, if your e-mail is effective, right, whether or not people are opening it. they can track back, stuff on e-mails i feel like i'm just learning about stuff, one of the things they can do is track back did that person click on the web site? where did they click? what path did they follow through the web site. click on particular set of issues. attach all the information to the e-mail. next time you e-mail that person. wow!, they only clicked on tax pages. why are we talking to them about education. they don't care. they only care about taxes. so interesting. figure out who donated based on that stuff which can be helpful, right?

so, it is pretty cool. technology stuff is really, i think, i think it is something that some very small subset of our, broader political consulting community has really figured out. i think there are people who are really good at it. and i think people will sell you the moon and don't know what they're talking about. it is pretty fascinating to talk to people about it. somebody else had a hand up over here, no? yeah? >> with early voting more pop, do you see it topping off eventually or, will all early voting 20 years from now? >> i think -- i think in states where everybody votes early i don't think that is model that every state is going to follow because i think there are a lot of people in our country who see this like great communeal election day something pretty important. so i don't think everybody will go to 100%, you know, voting through the mail or any of that kind of stuff. i think, internet security

is place where also people aren't very comfortable saying everybody can vote at home from their web site. i don't think that is a place we'll go anytime soon. i do think states like california and washington is another good example, where it has been, california been through a bunch of election cycles, and pretty stable people who are early voters. you can't marginally change people who voter, despite great effort you can only move couple percent. those are states to watch will it stablize as 40 to 50%? will it be half and half proposition? the part of california i think is interesting that local election clerks like county clerk goes through just before election day and says, here's where the voting places are going to be. they also go through like six or eight weeks before are we voting by mail or is it going to be, they consolidate all the places, there is just not enough people geographically to make everybody go to city hall to cast a ballot so all

those people vote by mail that will be interesting thing especially with contracting local budgets, that i think it will be interesting to see how that work out. >> is there any way to make sure that people actually vote themselves? i'm from austria. the discussion is always you husbands vote for wives in mail-? >> oh really. i think you have to trust to cast their own ballot. that's interesting. my husband. better not vote for me. i have to say i was it todaying my husband during the mccain campaign. i had been laid off by the campaign and went back to the campaign during the whole debacle that was mccain over two years. when i went back i just, we just started dating. does this mean we support mccain now? i said, yes it does, big clue. so, he became a big, next day, obama said something or somebody, it was still during primary. probably huckabee said something, i hate that guy. you can stay.

well, thank you so much. i appreciate being a part of it. good luck to everybody. [applause] i hope you all get a little bit of sleep working on this project but not too much. i hope you all still speak to each other when you're done. thank you. >> back at 1:15. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

>> so a lunch break now at american university's campaign management institute. they will resume about 1:15 eastern time this afternoon. as will our live coverage at that point. the next seminar a discussion on campaign finance planning and major donors. again that at 1:15 p.m. eastern time. our live coverage will continue then here on c-span2. now, a 2009 review of health care, from today's "washington journal.". >> host: julie rovner of npr we keep hearing when the issues like public option and abortion will be big issues to tackle. what are the other issues that will have to be meted

out when these two bills meet together? >> guest: a lot of people think the biggest issue will be how these bills are financed. remember the president said he will not sign a bill that is not paid for. deed both of these are paid for. in fact the senate bill would reduce the deficit over 10 years but something in the neighborhood of $130 billion but paid for very differently. both of them of course have reductions in medicare spending to the tune of about half a trillion dollars as the republicans gone to town saying. but the other have of the money comes from very different places. the house bill would basically tax the wealthy. they have a surtax, called millionaire's surtax only millionaires for couples. half millionaires for individual people. the senate bill goes basically taxes health care providers, makers of medical devices, pharmaceutical makers, the insurance industry. then they also have separate from a tax on insurance plans.

they have this cadillac insurance plan tax. these are plans with very generous benefits, of course there's a policy reason for. they want to, they want people to be cognizant if they have these very generous benefit packages because they think leads to overuse of health care services. idea of that tax is not so much to get money from the tax but to get employers who offer such generous benefits to stop offering such generous benefits. that is the idea really behind that tax that is going to be a big fight whether that cadillac insurance tax will be there. and then basically that whether they will go for, sort of taxing the health care provider community or taxing the wealthy. that will big, big fight. >> host: if you have those different philosophies on how to pay for an issue who are the ones to watch as discussions about how those things and who gives in this case, who gives to whom how

it gets paid for? >> guest: actually i talked to the about this last week and i asked him that very question. he seemed to think there might be a little bit of. i think that is indeed a possibility looking for compromise there could be a smaller sure on the wealthy and some provider taxes. that is certainly one way to split this. you do some of both. that one distinct possibility. there is also, i should have mentioned in the senate bill, there is an increase in the medicare tax for the wealthy. and that's another possibility. that is sort of the seam that you have sort of a different way to tax rich. have them pay a little bit more in their medicare tax. so that's, another possibility that can be thrown out there. so i think that is place where you would watch all the conferees. the conferees have not been named but you can expect them to be key leaders of the, the major committees would be the finance committee and ways and means committee and energy and commerce committee and education and labor

committee in the house and senate. those would be key people and leadership obviously play a very key role in both the house and senate. harry reid, nancy pelosi. >> host: are there current discussions between the two over there even before the friends committee? >> guest: absolutely. the staff is certainly not off this week. even though members gone home, the staff is getting ready. they're putting together paperwork that needs to be done. there is enormous amount of paper that needs to be prepared for a friends like this. i think people underestimate how much work it takes just to lay out what needs to be done in order to put bills like this together. we keep talking about big issues. abortion and public option and financing. but there are smaller issues that are different that are going to have to be worked out and those do take some time even though they're not, some of these things may never rise what we call the mem level to actually members but staff will have to work out differences. in the end it will have to be one bill. remember these are 2,000-page bills, both of them. they will have to be put

together into one. takes a lot of work. >> host: is there confidence from democrats on both sides a final package will come together? >> guest: oh, yeah, absolutely. there really is. in a lot of ways structure of these bills are very similar. the idea of these exchanges where people would go to get their insurance. although that is another point of contention because the changes are state-based in the senate bill and they're sort of more nationally-based in the house bill. that is something that will probably rise to the member level, members will have to talk about. there would be these thresholds. there is lot of insurance regulation again, fairly lar in both the house and senate bill. there would be, medicare changes and, these are sort of important changes in medicare, a lot of trying out different ways of trying to save money in medicare that they hope would then spread to the private sector. like we say, you know, budget director peter orszag likes to say, bend the cost

serve. slow the growth of health care spending those are in both bills. some are not exactly the same but those would certainly would be work outable type of things. there are a out of things that can be put together relatively easily and but can be tedious and time-consuming to actually write the bills. that is what took so long. it has taken 11 months where we are now. >> host: we have our guest 9:30 today to talk about what is left to do for health care bills in progress, your questions about the details in both of those bills. if you want to talk to her about it. 202-737-001 for republicans. and 202-628-2005. for independents. contact us in two other ways. e-mail us. journal@cspan.org. there is the web site or, web address there and then if you follow us on twitter. c-span wj. you spoke to the president, did you speak to him what

his role will be here on out? >> guest: i didn't actually but jim lehrer who spoke to him after me did. he expects to have people down to the white house to really be in the middle of this conference process which i thought was interesting. he has taken a very hands-off, personally a hands-off approach to this. there have been white house officials in, every time you walk around the capitol you run into one. you can't turn around without running into somebody from the white house. they have definitely been involved but they have really wanted to leave this, it has been very difficult for both the house and senate to work this out obviously both bills passed with not a vote to spare. in the house, even though there is large democratic majority, you had, three dozen democrats did not vote for the bill. in the senate they obviously needed every single member of the democratic caucus and got it but it was not easy. clearly there was a lot of arm-twisting and deal-making.

and that happened. but i think now in this conference process the president said to jim lehrer he expects to have negotiators to the white house. republicans pretty much abdicate themselves from this process. there was not, there was one republican in both houses, total of one republican who voted for this bill. so i think when you see the conference process, there will be republicans appointed to the conference now in 2003 when they did the medicare prescription drug bill. democrats are basically shut out of the room in the conference process. i don't know what is going to happen in terms of whether republicans will be invited to be at the negotiating table or not. that will be something that will be interested in seeing. >> host: did you know, mr. layer asked why the president didn't take a more direct role beforehand? >> guest: i'm trying to remember whether he did or not. i was, interested in that. it was not a question we were able to get to. we only get a few minutes with the president. it was something that i was interested in but was not a question that we got to. >> host: what was interesting about that question? >> guest: because i think

that, i was surprised the president was so active leading up to his in the fall on this issue. and then when congress, when house and senate were actually doing these bills in the fall, the president had really personally sort of moved on to other issues, to afghanistan. i was kind of surprised that the president was not more out there talking about health care. yes, his staff was up on capitol hill but it was more of a behind the scenes role. i was a little bit surprised president was more pushing it leaving a vacuum for republican complaints about the bill. while republicans complaining about the bill the polls were going south on this issue. >> host: julie rovner, our guest. questions are coming in via multitude of lines. start with the phones. bloom ming, illinois. karen on our republican line. >> caller: good morning. i want to be respectful because i'm a respectful person but i'm so angry, i just feel like all my heart

and my words are in my mouth and ready to explode. me step back a moment. this issue is extremely controversial. i would appreciate it, c-span, if when you had a guest who is speaking on issue, that you would now, and, would have in the past, had those that represent the full spectrum of ideas and concerns. one myth i want to dispel is that republicans are not for health care reform or don't care. that is an absolute untruth. and they have been, i just lost my, i wanted to say full of voice. i watch c-span in the even, many, many evenings when the doctors who are in the house, spoke about all of their ideas and plans. and i doubt that a lot of people were watching.

they were effectively shut out and have been shut out and they have presented many, many amendments that have just been dismissed. the truth of the matter a lot harsher what i'm speaking. this president wants this. it is more about control than it is about health. and, he has used abused and manipulated many people to bring it to this point. >> host: we'll leave it there, caller. just in case, we have a lot of different perspectives on this issue. if you want to check out our c-span site for our health care hub, as we call it find all those russ perspectives from legislators other viewpoints on this issue and find it all in one place at cspan.org. miss rove. >> guest: i don't mean to suggest for a moment this isn't highly controversial and republicans don't disagree and deeply care about health care and very much disagree on this issue. one thing i will say from my own reporting there are a lot of republicans who are

upset with the strategy that the republican leadership has taken on this, which is to basically say no to this bill. there are a lot of republicans, particularly in the senate, who really wanted to, to find a bipartisan bill, come up with a deal and basically their leadership was saying, you know, our position is going to be that we're simply going to oppose this bill and you know, we're not going to really try to, make it better, to improve it, come up with something we can support. and i think that was really a decision that was made by the recan leadership. now i think the house members, house republicans have, do have, sort of legitimate arguments. i think both house and senate, there were a number of republican amendments that were adopted in committee this both the house and senate that were later basically dropped out of the bills that came to the floor. i should point out, this, this is sort of the problem with being in the minority. this happened to the democrats when they were, they were the minority. i was listening actually,

believe it was to c-span yesterday to james thurber, talking about the plight of the minority. i'm not saying that two wrongs make a right. just sort of thinking having covered congress long enough to have seen both parties now in the minority and switching back, that neither party treats the minority very well when they're in the majority. it's really too bad. i think when i first started cover congress in the 1980s parties got along considerably better than they do today. >> host: for perspective, minority leader boehner on the bill, health care. >> now speaker nancy pelosi is pressing ahead with her $1.3 trillion government overof health care. we believe that her health care bill will destroy 5.5 million jobs in our country. according to a methodology developed by the president's senior economic advisor. the congressional budget office estimated our plan will lower premiums up to

10% for small businesses, which will make health care more affordable and, help create jobs in america. in contrast the speaker's bill, includes job-killing taxes and mandates that will hurt small businesses. and for the sake of our families and small businesses, this job-killing bill needs to be defeated. >> host: that was from november. we have someone oner who asks this question about medicare specifically. this is identify him settle as old sarge how can the medicare savings pay for new programs, eg, reduce deficit and extend the medicare trust fund at the same time? >> guest: that is interesting question. actually there was some discussion today that the congressional budget office is saying you can't double count that money. and that's going to be a big issue that is going to come out. one of the things about the medicare savings those medicare savings are not being used to, to cut benefits, to seniors. those are medicare savings

supposedly, if they work right, being used to make the program more efficient. the idea, particularly in the long term they will change the way that medicine is practiced. this is the great hope. is the new, we've had greats over the 20 some years i've been covering health care. we had lots of gray hopes how to change the trajectory of health care spending. the idea to change the incentives. so there are a number of -- now most of the cuts i should say, certainly in the first 10 years are simply the same old reducing payments to health care providers. in most of the cases they are, we have made, bigger cuts before without great harm to patients. although every time you make cuts like this people whose incomeses being cut scream and yell patients will be hurt. in most cases that has not proved to be the case. in general a lot of more experimental things that are in this bill are things that basically all the health economists experts say are the things that